Excerpts from the notes I’ve seen. More as they come in.
Samik Chatterjee, J.P. Morgan: Our Thoughts and Highlights Relative to Congressional Hearing on App Store Practices. Notable companies such as Rakuten and Spotify have filed complaints in the EU regarding App Store practices and fees. These complaints include: a) the disadvantage for ebooks and music services to compete against Apple’s own services which don’t have to pay the same commission; b) policies to restrict app releases; c) prohibiting developers from disclosing that users can subscribe outside of an app to avoid the Apple subscription fee, and d) creating apps that compete with newly introduced apps such as PCalc for the Apple Watch. As highlighted in Mr. Cook’s testimony, Apple’s own software comprises only 60 apps of the 1.7 mn available on the App Store and Apple has been more recently willing to exempt “reader” apps from commissions. The strict policies were justified by Apple as key to providing consumers the security and privacy that Apple has differentiated its products on.
Daniel Ives, Wedbush: Thoughts on Antitrust Hearings; Grandstanding Event with Some Concerns Raised. While there is a lot of noise and political grandstanding during this highly anticipated event, we believe the highlights so far have been: 1) Bezos discussing that Amazon may have improperly used third-party seller data which remains a key concern around competition from regulators, 2) Cook getting grilled around Apple’s App Store and its fees (30%) charged for developers although so far the bark has been worse than the bite, and 3) Facebook and Zuckerberg defending its acquisitions of Instagram and WhatsApp saying its a platform now better for consumers.
Gene Munster, Loup Ventures: Winner, Apple: Apple received 15 questions, about 20% of all questions asked. Cook fielded questions related to the App Store take rate along with policies regulating app availability. Beyond the number of questions, the topics for Tim Cook largely orbited around the App Store, which we estimate accounts for about 5% of Apple revenue. By comparison, the other tech companies fielded questions that impacted the majority of their revenue.